Dateline: April 14, 2005

Mutual Energy seeks to raise fuel charges

AUSTIN – Mutual Energy SPP (ME SPP), has filed a request with the Public Utility Commission of Texas (PUCT) to reconcile fuel costs and increase fuel factors for electricity customers in the west Texas counties of Childress, Collingsworth, Donley, Hall, and Wheeler.

The request was filed because the existing fuel factors have not been met and currently do not meet the market price of natural gas used to generate electricity.  Consequently, ME SPP has requested permission to increase the fuel factors used in calculating the total electricity bill and to recover through a surcharge the approximately $1.6 million (including interest) in fuel costs not collected from January to December 2004.  

If the request to increase fuel factors is approved as requested, the new fuel factors would go into effect in June.  Residential customers using 1,000 kilowatt-hours of electricity a month would see their average monthly bill increase approximately $11.07, according to a public notice in this week’s Enterprise.

The beginning of the surcharge is timed to follow expiration in October of an existing $3.52 monthly surcharge from the last fuel reconciliation.  A second existing surcharge for $3.84 per month will expire in January 2006. That surcharge was for the final fuel reconciliation when the area was served by West Texas Utilities.

The expiration of the two existing surcharges will offset the proposed fuel factor change and proposed surcharge by approximately $7.36 for residential customers using 1,000 kilowatt-hours of electricity a month.  

If the surcharge request is approved as requested, residential customers using 1,000 kilowatt-hours of electricity a month would see their monthly bill increase approximately $11.50 beginning in November 2005 and continuing through December 2006.  

If the fuel factor increase and the surcharge are approved as requested, the price of electricity will increase from an average 10.9 cents per kilowatt-hour to an average price of 13.1 cents per kilowatt-hour.  Even at the increased price, customers will be paying prices comparable to those paid by customers of WTU Retail Energy. 

This is the second fuel factor adjustment that ME SPP has requested since January 2002. By comparison, WTU Retail Energy has increased its fuel factor four times during the same period of time.  

ME SPP serves the approximately 7,200 customers in the five west Texas counties because they are located in the Southwest Power Pool, which has not yet begun retail electric competition.  

ME SPP is a subsidiary of American Electric Power (AEP). AEP owns more than 36,000 megawatts of generating capacity in the United States and is the nation’s largest electricity generator. 

AEP is also one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.